House sale? Trust your instincts

THE recent slowdown in the UK housing market might prove to be short-lived, as figures showed the number of mortgage approvals rose for the first time in five months in June.

Economists said the figures suggested lenders were getting to grips with the new rules that came into effect under the mortgage market review (MMR) in April. The tougher rules require lenders to take additional steps to ensure people will be able to afford their mortgage repayments in the future

The Council of Mortgage Lenders also forecast a stronger picture for the mortgage market in 2014 and 2015. Economists suggest lenders are getting to grips with tougher rules on mortgages after approvals increased to 67,196 in June; this does, however, contradict what is being witnessed within 'on the ground' in the housing sector. For example, Rightmove says the average asking price fell 0.8% amid latest signs that the housing market might be slowing.

The prices demanded by sellers putting their homes on the market have fallen for the first time this year, in the latest sign that some of the heat is coming out of the UK housing market. The average asking price fell by 0.8%, or £2,116, to £270,159 in July, according to Rightmove. It was the first monthly drop since December and compared with a 0.3% rise in July 2013.

A price fall in July is not unexpected as prospective buyers turned their attention to the summer holidays, not to mention the added distraction of the World Cup.

Buyer confidence may also have taken a knock with suggestions that mortgages are becoming harder to get and repayments may get more costly sooner than originally anticipated, should the rumours of an interest rate rise before the next election come true.

The fall in asking prices was widespread across England and Wales, and included the south-east and Greater London, which are the most expensive regions. The only areas to record a rise in July were the north-west, the west Midlands and East Anglia.

Lower asking prices in July pulled the annual rate of growth down to 6.5% from 7.7%. It was the latest sign that frenetic activity in the housing market might be easing off. Mortgage approvals fell for a fourth month in May, according to Bank of England data. One of the key drivers of rising house prices over recent months has been a lack of properties coming on to the market. Britain was still suffering from a structural deficit in housing stock, with demand outstripping supply in the more popular areas.

In addition, the average time it took to sell a property fell to 65 days in the second quarter of the year, from 75 days a year earlier. While figures from the Bank of England showed mortgage approvals have slowed since late 2013, they were higher in the year to date compared with the same period last year.

As you can see, there are mixed messages coming out of the housing market, from region to region and from professional bodies within the industry. The view remains uncertain and inconsistent and therefore trust your own instincts and if you feel a move is necessary or appropriate...move!